History of Economic Thought

History of Economic Thought

Question 1

Adam Smith is considered to be the founder of modern economics due to his presentations of various thoughts that are being integrated into the functioning of economy and markets in the recent era. However, the predecessors of Adam Smith have a strong and influential contribution in the field of economics. The economists of the seventeenth and eighteenth centuries who are regarded as the predecessors of Adam smith provided a number of insights into the subjects and theories of economics despite of the wrong trials and false turnings in the subject. The investigations of the thoughts and views of some of the economists are very well documented by Robert Heilbroner (1997, pp. 353) in his book teachings form the Worldly Philosophy. The robust principles of economics rely upon the actual findings of some of the economists such as Thomas Mun, Bernard Mandeville and Richard Cantillon collected by Robert Heilbroner.

The pre- Simithians economists analyzed the themes of trade activity, price values and importance of treasures and its usage in their analysis of the economics concepts. These economists tend to offer their views regarding the free trade as one of the most influential method to maximize and develop the wealth of the nations. The schools of thoughts in economics that lead towards the foundation of nationalistic policies and imperialism include the mercantilism, American institutionalism, Keynesianism, Austrian economics and neo classical theory. Heilbroner defined the views of the 16th and 17th century economists related to the mercantilism. The doctrine of mercantilism resulted in the identification of the power and national wealth which is being dependent upon the ability of a nation to acquire the colonies that could serve the consumers of a society, the investment and saving in the new assets and capital, the reduction in the exports and the enhancement of imports and the acquiring of silver and gold. The evaluation of the concepts of the pre- Adamites era economists by Heilbroner (1997, pp. 189) identifies that in order to maximize the wealth of a nation, it is important to pay just prices to all the laborers by the nation. They also hold the view that the encouragement of the large companies within an economy to carry out strategic alliances is the approach of maximizing the wealth of the nation .

The formation of strategic alliances by the large corporations would lead to the outperformance of those companies that are foreign inbound or multinational corporations. It is helpful in contributing to the gross domestic product of the home country and encouragement of the local producers within the economy. The economists of 16th and 17th century holds eh view that the maximization of the wealth of a nation requires the decentralization of the government of the country and authorizes the local authorities regarding the regulation of industry and corporations. The deregulation of the foreign policy regarding the international and foreign trade would also develop the internal strengths of a nation and enables it to maximize ...